Go-forward move comes with eye on e-commerce and as losses mount for parent company Vystar
WORCESTER, Mass. — Rotmans will begin liquidating its 200,000-square-foot store here this week with plans to remodel, scale down the footprint and edit the assortment for a lineup that appeals “to the modern consumer and lifestyle.”
The company, which bills itself as the largest furniture and flooring retailer in New England, hired Zimmer Hester Furniture Liquidators to manage the “$20 million storewide liquidation sale” beginning Thursday, according to a release. Rotmans then plans to close for about two to three weeks to begin the remodeling and reformatting process.
“We’ve earned the loyalty of customers for over 60 years based on providing the best products, service and value overall,” President and CEO Steve Rotman, said in a statement. “To continue that level of excellence we decided a year ago that it was time to remodel our showroom and refresh our product offerings.”
Rotman declined to release many details about what the store will look like once it’s revamped, but he told Home News Now the showroom likely will be scaled back to about 130,000 to 140,000 square feet and that the company may look to sublease the unused space to other retailers. After the liquidation sale and remodel, the emphasis will be “much more stock-based.”
“My concern is, with the growth of companies like Amazon and (other e-commerce giants) and immediate delivery, it’s going to be hard going forward without having stock available for faster delivery,” Rotman said.
“That’s become a key issue. A lot of manufacturers on the special order side of it have been running extended (lead times). … Delayed shipments “was one thing at the beginning of the coronavirus (pandemic) but now customers are getting impatient. If the manufacturers can deliver on special orders within six to 10 weeks, great. You start getting into 14, 16, 18 weeks, and it becomes almost impossible for the consumer.”
In a release, Rotmans said its offering immediate pickup or delivery during the liquidation sale and deep discount across all categories, including on brands such as Southern Motion, Leather Italia, Best Home, Kuka, Fusion, Klaussner, Steve Silver, Howard Miller, A-America, Beautyrest, Sealy, Serta, Tempur-Pedic and more.
Rotman said the merchandising reset is in the early stages and it’s too early to speculate on what brands the retailer will feature in its updated format. Right now, he said, Rotmans wants to concentrate on the liquidation sale and avoid confusing the customer with too many messages. He also said it’s too early to say how long the sale will run, given the amount of inventory that needs to be sold off.
The $20 million liquidation noted in the release is the retail value on the inventory, he said.
While the store refresh was decided on a year ago. Rotman said the effort was slowed by the Covid crisis. When completed, it “will ultimately create the new showroom experience with a more curated selection of products that appeal to the modern consumer and lifestyle,” the company said.
Rotmans started in 1945 as a family-owned furniture and carpet concession business in a 10,000-square-foot space on Southbridge Street in Worcester, Mass., and grew into one of the largest furniture retailers in the region with a reputation for high-quality products and customer service.
In 2019, Rotmans became part of a publicly-traded Vystar Corp., when Vystar acquired a majority interest in the retailer. Vystar, which also produces a line of air purifiers and owns the technology to produce Vytex Natural Rubber Latex, has incurred significant losses and experienced negative cash flow since inception,” according to its latest quarterly report. The company appears to have particularly struggled in the wake of the pandemic as Rotman accounts for the bulk of all sales.
For the quarter ended Sept. 30, Vystar revenues decreased 8.2% to $5.5 million, with the company citing the impact of Covid-19 for the decrease. Gross profit increased to $3.0 million from $2.7 million, “primarily due to a change in purchasing,” according to the report filed with the Securities and Exchange Commission, which went on to note, “Merchandise is being purchased in large qualities from fewer vendors.”
The net loss for the quarter increased to $4.0 million from the previous $1.7 million net loss, with the company citing increased expense from Rotmans’ operations, increased share-based compensation, legal fees and a loss on settlement of debt.
The report also noted a growing deficit in working capital, and “Because of this history of losses and financial condition, there is substantial doubt about the company’s ability to continue as a going concern.”
Vystar said in the filing Rotmans is expected to add about $25 million annually to Vystar’s top-line revenue.
In an interview with Home News Now, Seve Rotman, who is CEO of both Vystar and Rotmans, acknowledged the challenges stemming from the pandemic but added that the situation has been improving for both businesses.
“Under the Vystar side of it, a lot of exciting things are happening that will probably be announced over the next month, so we’ve been doing extremely well in terms of the product side.”
Rotman specifically noted Vystar’s RxAir residential and commercial air purifier business, which features products proven to destroy airborne bacteria and viruses vs. just trapping them like most filters and purifiers. Given Covid concerns, that business has “become very active,” he said. “We have over seven containers on the water now.”
And while Rotman’s faced setbacks last year, especially during a period from March 24 through June 9, when the store temporarily closed, business is improving there, too, and, “sales have actually been fairly good,” though he acknowledged more work needs to be done on that said.
Despite the going-concern language in the SEC filing, the company is “definitely” moving forward with the new Rotmans format, he said.